Mistry's emailed parting shot, leaked late on Wednesday, turned into a viral sensation in India by Thursday morning

Days after he was ejected as chairman of Tata Sons, Cyrus Mistry has stunned India with a hostile 5-page letter outlining governance failures, poor decisions and looming writedowns at one of the country's most revered conglomerates.

Mistry's emailed parting shot, leaked late on Wednesday, turned into a viral sensation in India by Thursday morning, captivating readers on social media and prompting shocked headlines in leading dailies, as the government told politicians to stay out of what has become a public spat.

The country's two largest exchanges, citing the leaks, have demanded clarity from Tata's 27 listed units.

At least one unit, Tata Steel, dismissed talk of write-downs. But shares in all of the group's major listed companies fell on Thursday.

Tata Sons has not commented since the letter, a defense of Mistry's record, surfaced.

"Mistry tears into Tata," the Times of India daily said.

Public confrontations of this nature are rare in Indian corporate life, particularly when they involve conservative and established conglomerates like salt-to-cars group Tata and a patriarch like Ratan Tata, who has temporarily taken back the helm of the parent group.

"It has taken everyone by surprise. Nobody would have thought such things could happen at Tata," said J. N. Gupta, a former executive at India's markets regulator and now managing director at Stakeholders Empowerment Services.

Inside Tata, a company that promotes its roots in the heritage and social values of the Parsi community, some workers have bristled at the board's treatment of Mistry: the company is famous for being a loyal employer. But executives also questioned Mistry's efforts to cut back or sell underperforming assets.

Ratan Tata was an acquirer in his time at the top: he oversaw deals like the $12 billion acquisition of Corus, formerly British Steel, in 2007 and the purchase of Jaguar Land Rover a year later.

Mistry by contrast, has tried to rationalise the sprawling portfolio, including selling much of the Corus business in Britain.

"It is like a bunch of finance or hedge fund guys that have walked in and decided to cut everything. This is not the Tata way of doing business," said one source close to the Tata group in response to the letter.

"If you are picking things that are not working and then trying to get rid of them, where is growth going to come from?"

Bitter Fruit

Lawyers, analysts and headhunters said on Thursday that the letter could mark the start of a bitter legal battle - but it was already a warning to any willing candidates on challenges ahead in running a sprawling and complex group.

"Any candidate that is now in the race or is considered, will pull up and refer to the letter from Cyrus Mistry," said Suresh Raina, managing partner with Hunt Partners, an executive search firm. "The new candidate will be very well primed."

Mistry, chairman of Tata Sons since 2012, accused the board of failing to give him "room to move", and argued Ratan Tata acted as an alternative power centre after officially handing over the reins, driving in particular deals that created two airline businesses.

Its Tata Motors arm extended credit too easily to fuel sales, Mistry said, and when fraudulent dealings surfaced at AirAsia India, they were not acted on fast enough.

Ratan Tata's lawyer Abhishek Manu Singhvi, dismissed the accusations in comments to local television and questioned the purpose of the "blame game".

"It's unfortunate that this kind of linen is sought to be washed in public," he told NDTV.

"Loss of confidence is a collective and subjective thing."

At least some investors brushed off the letter, arguing they too knew the extent of the balance sheet strain - but also Tata's record for keeping its companies afloat.

"The main question to ask is whether this letter means that Tatas will now change their style of business and will start closing down their loss-making units abruptly," said one debt investor who declined to be named.

"I will continue to buy Tata debt papers until I see some signs they are changing their style of business."

Yet governance experts said Tata would need to tackle the allegations, for which Mistry provides no proof.

"Either Tata comes out and denounces them successfully or they will lose their reputation as one of the best governed companies in the country," Gupta said.